Zimbabwe’s Revised Fuel Levy Set to Boost Infrastructure and Economic Competitiveness

The National Competitiveness Commission (NCC) of Zimbabwe has praised the Government’s recent move to amend fuel levies, describing it as a strategic and forward-looking measure aimed at reinforcing economic growth, infrastructure development, and long-term price stability.

The decision, effected through Statutory Instrument 50 of 2025, amended Section 22H of the Finance Act and introduced revised fuel levy rates now set at US$0.2470 per litre for petrol and US$0.1870 per litre for diesel. This adjustment, according to the NCC, is not only fiscally sound but also essential for Zimbabwe to remain regionally competitive in Southern Africa’s evolving economic landscape.

While the changes reflect a 19.3% increase on petrol and a 27.2% increase on diesel, the NCC emphasised that the levies will be introduced gradually to avoid disrupting fuel-intensive sectors such as agriculture, manufacturing, and mining. The commission stated that this phased approach demonstrates a commitment to balancing economic stability with developmental priorities.

Historically, fuel levies in Zimbabwe have contributed between 35% and 40% of the pump price—comparable to regional benchmarks in countries like Kenya and South Africa, where taxes make up a significant portion of fuel costs. The NCC believes that Zimbabwe’s new rates maintain this parity while allowing for crucial reinvestment into transport and energy infrastructure.

The commission highlighted that revenues generated from the revised levies will be used to upgrade major highways, rehabilitate ageing bridges, and improve the national electricity grid. These projects are expected to lower transportation and logistics costs across all key production sectors, ultimately enhancing the competitiveness of Zimbabwean goods on global markets.

In addition, the NCC pointed to the potential of the fuel levy to drive renewable energy investments, reduce energy bottlenecks, and modernise national infrastructure. Such developments would not only improve the ease of doing business but also attract much-needed foreign direct investment.

However, to cushion the impact on vulnerable sectors, the NCC called for the introduction of targeted incentives, including accelerated tax rebates for industries with high fuel usage. It also recommended regular regional benchmarking to prevent smuggling and arbitrage, along with the establishment of stakeholder forums to fine-tune levy structures in a collaborative and transparent manner.

The commission expressed confidence that the benefits of Statutory Instrument 50 of 2025 would become more evident in the medium to long term, especially if the funds are deployed efficiently and transparently.

As Zimbabwe positions itself to harness renewed interest in regional trade and investment, the NCC’s endorsement sends a strong message to local industries and international partners: that the country is committed to balancing fiscal responsibility with developmental ambition.

By adopting a carefully structured approach to fuel levies and ensuring the reinvestment of proceeds into productive sectors, Zimbabwe aims to emerge as a model of pragmatic and competitive economic policy in the Southern African region.